Why the “Missing Middle” continues


The “Missing Middle” of capital is the funding for promising young companies between their initial idea and their first few million dollars of revenues. As you can imagine, getting to even $1 million USD in annual revenue is a challenge for African entrepreneurs given relatively few Angels and only a handful of seed funds.

Africa Eats helped of our of bizi grow from $100,000 to over $1 million in annual revenues with the first two years after we met them, and this company will double or nearly so this year. And yet here is what one well-known institutional funder wrote when we pointed them to that story of growth:

We have received your request. We prefer to provide growth capital with minimum tickets of USD $1 million which represents approximately 30% of sales.

From the communication we received ________ is currently doing about USD $1.5 million.

It’s understandable that 2020-2021 were difficult years following the adverse effects of Covid.

Its my proposal we review this year’s (2022) financial and operational performance and make an informed decision from early 2023

Or in other words, neither $1 million nor $2 million is big enough. Come back when the company is already earning $3 million.

Especially disappointing news from an institution whose capital is raised philanthropically, and thus not seeking to maximize their returns. If those institutions can’t fill in the missing middle, then who can?

We can. And we do. And we invite others to join us (as investors or co-investors) as real people suffer from real hunger and real poverty due to this high bar set by the larger institutions.

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